The Cloud Is Big Business, But for How Long?

Cloud storage is big business. Can you keep your servers running and connected to the internet? If so, it's like printing money.

The proof: For the first time, Microsoft makes more money from cloud services than from traditional licenses, Channel EYE says. Jeff Bezos also told Charlie Rose last year that Amazon makes most of its profits from the cloud, too, and that it's at least seven years ahead of its rivals. The other big players include a slew of independent operators, as well as Google, which should by all accounts be No. 1.

I've generally pooh-poohed the cloud, preferring local control, especially for the individual user. But with Microsoft's Office 365—which lets you store 1TB of docs and other files online via OneDrive—you can see its usefulness (insofar as maintaining old files is concerned).

That is until the terabyte runs out. Microsoft already offered, then canceled, "unlimited" storage on OneDrive. Did no one in Redmond think that through? With unlimited data, users are not going to be conservative when it comes to saving files, photos, movies, or anything else. "What a cute puppy GIF. Look, he is dancing!" *Right-click > Save*

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For Microsoft, the cloud is a trap. It's not Microsoft's core competency. The company codes, and makes operating systems and general software. Running massive server farms for someone else is weak.

But the real danger comes from China. One of these days, an aggressive Chinese company will wipe out existing cloud operations with a cheap alternative. Just look at all the white label Android products coming out of the country. Just as Xiaomi and Huawei have charged into the mobile market, it's only a matter of time before a similar company tackles storage.